A phrase I’ve heard a lot at Sapphire so far is ‘Intelligent Enterprise’, defined by SAP as firms using data to get smarter, more automated and closer to their customers.
But working towards this goal isn’t a simple task, and will require some drastic changes to how businesses operate, as outlined by three organizations speaking during a panel session at the show.
Energy giant Shell is taking a frank look at its IT estate in a bid to stay competitive, according to enterprise platform manager Frank Westerhof. The company expects to see more change in the next 10 years than it experienced in the past 100 years, thanks to advancements in automation and Artificial Intelligence.
To ready itself for the ensuing upheaval, Shell has accepted that the bulk of its technology is not what will make it competitive. Hence it has taken the rather unusual step of working with its competitors on developing the best possible IT infrastructure for its industry, which they can all benefit from. Westerhof explains:
We have to make the choice between what we really want to do ourselves, and get really good at and be competitive, and what do we want to do in a market-standard way benefiting from the scale of the market. Part of our IT strategy is we think that 85% can be done with market-standard platforms, and 15% is where we’re doing our own stuff.
Shell turned to SAP to provide the technology nous for the project, thanks to the “intimacy” the firm has built up with the energy industry over the last 25 years, he adds:
We started working intensely with SAP to see what does this digital core of the future look like. We didn’t want to do it on our own, so we worked with SAP to create a consortium of oil and gas companies to shape the digital core for the sector. We’re creating it together. It’s the corporate equivalent of open source.
For Shell, standard business applications like ERP are not going to hold the key to developing this digital foundation; the firm has already consolidated its systems to a great extent and moved to infrastructure as a service a long time ago. But Artificial Intelligence (AI) could provide a differentiator, reckons Westerhof:
The obvious value levers that people had available to move to the next generation in ERP have been exhausted in Shell already. But things like AI, structurally simplifying your data model, really exploiting business process rearchitecting on the basis of real-time machine learning, those things are fundamental for us to build a value case moving to this new digital core.
Baking digital in
Biscuit and confectionery giant Pladis, owner of brands like McVitie’s and Godiva, has also gone through a re-architecure of its entire business, based on the understanding that in order to survive, it needed to start not with the products but with the consumer and their wants. Chief Digital Officer Anthoula Madden explains:
It’s a fundamental change in our operating model from product to experience, from driving the manufacturing cycle to starting from the consumer and working backwards to how we want to engage. Consumers are digital, so we need to be digital but what does that mean? We need to take that information in real time, personalize it and engage with them, and this means realigning our operating model across any channel involving customer interaction.
That means we need to be able to process a whole load of data in the speed of real time. At the moment, we’re wasting time trying to synthesize data. We need to step up our capabilities to do the insight, asking the right questions because you now have the information.
Biotechnology firm Moderna Therapeutics had an advantage over both Pladis and Shell when it came to getting value from its data. As a much younger company, it has been able to build a more intelligent business from the ground up. Chief Digital Officer Marcello Damiani explains:
I wanted to build from the get-go a solution to help us take advantage of the data that we collect and that helps us build efficiencies, not for efficiency’s sake, to help improve the quality.
It’s important that we have the highest quality in the drug product. Learning is key. We’re going through an iterative cycle of learning, and the more data we have, the more structured and integrated this data, the better we can use it to change people’s lives. Building from the get-go in the cloud with automation and integration, you can use predictive analytics, you can use AI, you have the agility and flexibility.
While all three organizations are approaching their digital journeys in different ways, one thing they are all convinced about is the fundamental part AI plays – with no need for us all to worry about losing our jobs just yet.
Moderna is currently working on a personalized cancer vaccine, using AI and historical data to model and predict cell mutations most likely to trigger the immune system. The firm hasn’t seen any impact on employees effected by the use of AI, which is being exploited as a way to improve the quality of its drugs rather than as a way to cut costs. Damiani says:
AI will not replace people, it will augment the capability of people. The most important aspect of AI for us is in the quality control of drugs where we provide tools to teams to help them assess the quality of what we are doing.
Shell is taking a similar approach to AI, as a means of doing more with the people it has. As a capital-intensive company with a raft of different equipment to maintain, the firm is looking to AI to guide its maintenance staff, navigating them to the specific places where kit needs attention, helping them to see exactly what needs to be done and guaranteeing they have access to the latest construction information.
As Westerhof explains, the drivers are much more about improving safety levels, reducing casualties and increasing the reliability of its plants –all of which translates clearly into market value. He adds:
There are limitless possibilities of where the new technologies can help us do a better and safer job in these kinds of environments.
The 'want' list
While the firms were generally positive about the SAP products on offer to support them into the future, integration and speed were highlighted as areas for improvement.
Damiani explains that Moderna is looking for more integration between its systems and SAP’s, with praise for the latter’s decision to release more APIs:
Some of the data we produce is very specific to us. We want those integrated with the ERP, so we have a holistic view, so this data is interacting with the ERP to better understand the cause and the materials and the project.
Shell also has a request for SAP: go faster! The energy company has been looking ahead to where it needs to be five to seven years from now, and is clear that public cloud and multi-tenant is the way to go. Westerhof has been encouraged that SAP is developing a credible offering here for the oil and gas industry, but notes there’s still a way to go:
We’re working closely with SAP and other companies to get there. By the time the offering is solid enough for the core of our business, we can roll it out. For us the time is now. To be honest, we want to go faster. I’ve got board members that say, if the product is there now, I’m ready to invest next year. Help me by going faster.